FTSE 100 jumps to five-year high; banks rise

LONDON (MarketWatch) — Britain’s benchmark stock index rallied to its highest closing level in five years on Tuesday, as upbeat German data spurred a risk-on mode across Europe.

The FTSE 100 index
UKX, -1.69%
jumped 1% to 6,379.07, marking the highest close since January 2008.

Shares of Standard Chartered PLC
STAN, -1.64%
rose 2.4% after Morgan Stanley lifted the bank to overweight from equal weight, citing an improving outlook for its Asia business and recent underperformance in the shares.

“HSBC has now performed well on strong Asian earnings and an improved balance sheet. It now appears fully valued, in our view, given an uninspiring revenue outlook, and we move to” equal weight, the Morgan Stanley analysts said in a note.

“Vodafone must belatedly pick its poison,” the Bernstein analysts said. “[Vodafone] can choose structural decline mitigated by cost-cutting and increased spend, or it can try to buy its way out of the problem,” they said.

The broader U.K. stock market took inspiration from a European rally after German data surprised to the upside. The ZEW economic-sentiment indicator rose to 48.2 from a January reading of 31.5, exceeding expectations. See: German Feb. ZEW expectations index tops forecast

Shares of BP PLC
BP., -2.96%BP, -1.85%
inched 0.3% higher. The oil giant said it would fight the U.S. government in court next week over claims for fines related to the Deepwater Horizon oil spill. The company said in a statement that it has always been open to settlements on reasonable terms, but “faced with demands that are excessive and not based on reality or the merits of the case, we are going to trial.”

Shares of InterContinental Hotels Group PLC
IHG, -0.02%
dropped 1.8%. The hotel operator said revenue in China, one of its key growth markets, dropped in the fourth quarter due to “the ongoing industrywide impact of the China-Japan territorial island dispute, the political leadership change and the broader economic slowdown across the region.” See: IHG to sell flagship hotels as market improves

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